Almirall SA.’s (BME:ALM): Almirall, S.A., a pharmaceutical company, researches, develops, manufactures, and sells medicines and medical devices worldwide. The €1.71B market-cap company announced a latest loss of -€303.96M on 31 December 2017 for its most recent financial year result. The most pressing concern for investors is ALM’s path to profitability – when will it breakeven? In this article, I will touch on the expectations for ALM’s growth and when analysts expect the company to become profitable.View our latest analysis for Almirall
According to the industry analysts covering ALM, breakeven is near. They anticipate the company to incur a final loss in 2017, before generating positive profits of €57.36M in 2018. So, ALM is predicted to breakeven approximately a few months from now. How fast will ALM have to grow each year in order to reach the breakeven point by 2018? Working backwards from analyst estimates, it turns out that they expect the company to grow 49.62% year-on-year, on average, which is extremely buoyant. If this rate turns out to be too aggressive, ALM may become profitable much later than analysts predict.
Given this is a high-level overview, I won’t go into detail the detail of ALM’s upcoming projects, though, keep in mind that by and large a pharma company has lumpy cash flows which are contingent on the drug and stage of product development the business is in. This means that a high growth rate is not unusual, especially if the company is currently in an investment period.
Before I wrap up, there’s one aspect worth mentioning. ALM has managed its capital judiciously, with debt making up 23.34% of equity. This means that ALM has predominantly funded its operations from equity capital, and its low debt obligation reduces the risk around investing in the loss-making company.
There are key fundamentals of ALM which are not covered in this article, but I must stress again that this is merely a basic overview. For a more comprehensive look at ALM, take a look at ALM’s company page on Simply Wall St. I’ve also compiled a list of pertinent aspects you should look at:
- Valuation: What is ALM worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether ALM is currently mispriced by the market.
- Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Almirall’s board and the CEO’s back ground.
- Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.